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Australia’s rising cost of living is impacting consumer behaviour

Published May 13, 2022

Toluna,

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Originally published by Busy Continent.

Toluna’s Global Consumer Barometer Study is an index that taps into a community panel of 40+ million members providing accurate and timely information on the world’s current perceptions. The latest surveyed 1,000 respondents in Australia between 23-29 March 2022.

What were the key findings of the research?

The key findings show that Australia’s rising cost of living is impacting consumer spending. The increased costs of groceries, in particular, is forcing Aussie shoppers to make changes to their weekly shop. These changes include dropping their favourite brands in favour of generic ones, shopping around to find the best deals, and buying in bulk in order to save money.

Reducing social activities like eating out, and finding ways to reduce energy consumption, are some of the other ways Aussie households will be trying to cut back on spending.

Price hikes impacting grocery shop

The rising cost of living is having an impact on the way two thirds (63%) of Australians are spending their money. The increased cost of groceries is causing the most disruption, with 80% of Australians stating they’re being impacted by the rising cost of grocery items.

Aussie shoppers have particularly noticed the continuously rising cost of fresh food (79%), as well as frozen food (62%), tea and coffee (62%), dry pantry food such as biscuits, pasta, etc. (60%), household cleaning items (59%), bakery goods (59%), health and beauty products (52%), soft drinks (48%), pet care (46%), and alcohol (43%).

Aussie shoppers plan to change their shopping behaviours to combat price hikes, such as:

• Changing the brands they normally buy – 29%

• Buying more generic brands – 28%

• Shopping around in search of value – 27%

• Switching supermarkets to find a cheaper alternative – 25%

• Shopping more often to get the best deals – 25%

• Changing the amount of snacks purchased – 24%

• Buy in bulk – 23%

When it comes to purchasing decisions at the supermarket, price is by far the most vital factor for the majority of Aussie shoppers, with brand loyalty nearing the bottom of the list:

• Price – 72%

• Quality – 68%

• Health – 62%

• Favourite brand – 59%

• Sustainability – 58%

• On-promotion – 54%

With the cost of living expected to remain high, at least for the foreseeable future, 50% of Australians expect to be spending more on groceries for the next three months.

Tightening the purse strings

In addition to the rising cost of groceries, Aussies are also being impacted by price changes in other areas, like eating out (54%) and ordering takeaway (50%), buying clothes (53%) and beauty & skincare products (48%), booking holidays (52%), and electrical goods (49%).

Aussies said the first things they would forego in order to save money would include eating out (32%) and takeaway (28%), followed by overseas travel (22%), spending on premium brand products (21%), going to bars & pubs (18%), and going to the cinema (17%).

29% of Aussies are delaying purchasing items for their home as a way to save money, with 26% looking for more cost-effective ways to furnish their homes. Aussies are least likely to forego their mobile phone contracts (34%) and TV subscriptions (25%) to save money.

Energy savings

With energy costs also impacting finances, Australians are planning to review their energy consumption in order to slash energy bills over the coming months. 51% will be turning lights off whenever possible, while 35% plan to take shorter showers to reduce water usage.

The other ways surveyed Australians hope to slash energy bills are by utilizing eco/cold settings on washing machines and dishwashers (30%), reducing the target heating temperature (23%), and programming laundry during low tariff hours (19%).

What are Toluna’s thoughts on the survey?

“The rising cost of living is one of the biggest issues for Australians. Our research shows that Aussies are noticing price increases across a number of categories, and are changing their behaviours as way of trying to combat this,” said Sej Patel, Country Director, Toluna, ANZ.

“Brand switching and shopping around to find better deals are some of the key tactics shoppers are using to save money, with price being the absolute number one factor when it comes to making grocery purchasing decisions right now. Price changes are also impacting consumers’ plans when it comes to eating out and socialising with friends, right down to being conscious about shower timings and making sure all lights are switched off,” Sej said.

“Understanding today’s consumer is critical, and businesses will do well to ensure that communication with customers over the coming months largely focuses on price and value for money. It’s important that businesses evolve the way they position and market themselves in a way that aligns with current consumer sentiment,” Sej concluded.

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